Iran Insists on Tendering Oil, Gas Development Projects

Iran is determined to develop its oil and gas fields through tenders for international companies, a top oil official said, as the country strives to hold the first such tender since sanctions were lifted in the January of last year.

"We are keen to tender our oil and gas fields, although it would prolong the process of exploration and production," Ali Kardor, the chief executive of National Iranian Oil Company told ILNA on Monday.

According Kardor, the giant South Azadegan oilfield that is shared with Iraq, will be the first field to be tendered. He has also hinted at the possibility of developing the South Azadegan project by a consortium of British, Japanese and French companies.

Kardor said that a new model of contracts, dubbed as Iran Petroleum Contract, will be used to develop most oil and gas fields. However, the tendering process has hit the rocks since the first details of the IPC were unveiled in late 2015 alongside some 50 oil and gas projects.

The NIOC chief had said the tender for the coveted South Azadegan field would be held this month after failing to launch the tender in January.

But in recent weeks, officials have kept mum on the possible date of the first oil tender, leading to the inference that in the best-case scenario, the first post-sanctions oil tender could be held in the first half of this year.

Kardor said recently the NIOC is working to issue a second list of qualified companies for bidding in the upstream petroleum projects.

Iran is pushing for new deals with multinationals to raise crude production despite a global oversupply and persistently low prices. It is now pumping close to 4 million barrels a day, according to government reports, a level last seen before the tightening of sanctions in 2011.

As a preliminary step to develop the oilfields, Tehran has signed 12 agreements with international companies on studying the oil and gas reservoirs which mostly straddle south and southwest of Iran.

NIOC published a list of 29 companies last month which were qualified to participate in the oil and gas tenders.

The list included household names such as France’s Total, Royal Dutch Shell, Italy’s Eni, Lukoil and Gazprom of Russia, Danish conglomerate Maersk, China’s CNPC and Sinopec, Austria’s OMV and Schlumberger.